New York’s rich are fleeing the city
Since the beginning of the corona pandemic and the high infection rate in the city, many New Yorkers have left the metropolis and moved away. As Bloomberg Wealth reports, it is particularly the rich who have fled New York and retired with their families to the surrounding Hamptons.
But not everyone who fled New York in March or April comes back.
Instead, many are considering moving permanently and relocating to Florida, for example, according to Bloomberg Wealth. In addition to a new environment, this would have a second advantage for the New York rich: unlike the Big Apple, Florida does not levy any income tax.
The move of the rich could hit the Big Apple hard
However, the departure of the rich would have fatal consequences for New York. The metropolis generates around half of its income tax revenue from its super-rich. A group of around 30,000 New York families had total sales of approximately $ 133 billion in 2018 and paid $ 4.9 billion in income tax – half of New York’s total tax revenue in the same year.
If the wealthy New Yorkers no longer return to the Big Apple, this tax revenue is lost. In the city, which was hit particularly hard by Corona, this can have far-reaching consequences. It is already assumed that New York’s tax revenues will fall by 10 percent or 1.9 billion US dollars from 2020 to 2021 as the rich move away. A catastrophe for the city, which is now particularly dependent on financial means to take action against Corona and increasing unemployment. As the “Stern” reports, rents in the city center are already falling and many apartments are vacant – in southern Manhattan it is already five percent. In addition, due to unemployment, other New Yorkers may have to vacate their apartments involuntarily. In contrast, however, house prices are rising in the suburbs of New York.
However, many rich people see no reason to return to the city
New York’s governor is already appealing to the rich to come back. However, they see no reason to move back to the Big Apple anytime soon, on the contrary. The musician Dillon Kondon reports to Stern that New York has lost its attraction for many with the closure of restaurants, theaters and shops. Nick Barnhorst, who lived in New York for over a decade, also tells Stern that he no longer wants to move back to the city. Working from home in a small apartment and mostly closed children’s gardens is not desirable, especially with children. At Bloomerg Wealth, tax attorney Geoffrey Weinstein adds, “People are getting used to working remotely.”
Marie-Sophie Steinbach / Finanzen.net editorial team
Bildquellen: Luciano Mortula / Shutterstock.com, Alessandro Colle / Shutterstock.com
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